NZ shares snap decline as F&P Healthcare surges on upbeat outlook

New Zealand shares snapped a four-day decline as Fisher & Paykel Healthcare propelled the benchmark index higher, signalling strong first-half earnings growth and overshadowing slumps for Fletcher Building and Spark NZ.

Friday, August 23rd 2024, 6:31PM

by BusinessDesk

The S&P/NZX 50 Index climbed 60.64 points, or 0.5%, to 12,529.99, paring its loss for the week to 1.6%. Across the main board, 58 stocks rose, 71 fell, and 50 were unchanged. Turnover was $117.5 million, with F&P Healthcare accounting for $24.1m, while nine stocks traded on volumes of more than a million shares.

F&P, Spark and Fletcher

F&P Healthcare led the NZX50 as it surged 10.3% to $35.40, its first double-digit daily gain since March 24, and has advanced 51.2% so far this year. The medical products maker said first-half profit was forecast to rise by as much as 49%, with strong growth across all products and regions. It also raised its annual profit forecast range.

“The market is pretty quick to punish and reward results at the moment and is relatively volatile,” Jeremy Sullivan, an investment adviser at Hamilton Hindin Greene, said.

F&P Healthcare is “a $21 billion company, so that’s a couple of billion dollars added in a day”.

Spark NZ dropped 7% to a two-month low of $3.99 on a volume of 4.4m shares, the most heavily traded stock on the day. The country’s biggest telecommunications group missed its own lowered earnings guidance as public sector spending cuts and slow private sector investment sapped demand for its IT services businesses.

Hamilton Hindin Greene’s Sullivan said the decline in share price was a little overdone, but highlighted Spark’s growing exposure to more volatile sectors.

“Spark’s business is now more into services and increasing revenue, which is more susceptible to an economic downturn," he said.

Fletcher Building posted the biggest decline on the benchmark index, falling 8.5% to $3 on a volume of 3.2m, after saying it faces new litigation on two fronts, with Western Australian builder BGC expected to file a claim over its leaky pipes dispute, and the Commerce Commission claiming rebates by the Winstone Wallboards unit breached the Commerce Act.

Sullivan said the leaky pipes dispute held the greater potential liability for the building materials firm and that today’s decline was probably justified.

“Fletcher just can’t seem to catch a break,” he said.

Other stocks

Among other companies to report earnings today, NZX rose 0.7% to $1.38 after lifting first-half operating earnings by 12% and said it was tracking towards the upper end of its annual guidance range.

Channel Infrastructure increased 0.6% to $1.58, with 1.1m shares changing hands after the import oil terminal said first-half earnings rose 10% while affirming its annual guidance.

Port of Tauranga declined 1.3% to $5.52 after reporting a 12.8% decline in annual operating profit, with cargo volumes down.

Fonterra Shareholders’ Fund units rose 0.5% to $4.51 after the world’s biggest dairy exporter raised its forecast farmgate milk price – an input cost for the cooperative – while also signalling it’s on track to pay a strong annual dividend.

Winton Land dropped 10% to $1.90, with just 8,711 shares traded, after reporting a 69% decline in annual earnings as the subdued market weighed on sales.

Kiwi Property Group declined 1% to 96 cents. The commercial landlord declared a first-quarter dividend of 1.35 cents per share and reinstated its dividend reinvestment programme.

Marsden Maritime Holdings, which owns half of Northport, fell 3.1% to $3.39 with just 435 shares traded after reporting a 9% increase in annual operating earnings, while South Port NZ rose 2.6% to $5.85 on a volume of 244 after reporting a 13% decline in underlying profit.

Tags: Market Close